Adam Green, co-founder of the Progressive Change Campaign Committee (PCCC), says that banking executives should go to jail for giving themselves last-minute bonuses as their financial institutions are on the brink of collapse.
The assertion comes as Democratic lawmakers are calling for an investigation into the actions of bank executives after reports surfaced about Silicon Valley Bank’s (SVB) top brass doling out bonuses just hours before the Federal Deposit Insurance Corporation (FDIC) seized control of it last week.
SVB shut down after a massive bank run by high-dollar depositors left it without enough money to cash out deposits, which overwhelmingly exceeded the $250,000 federally insured limit.
Now lawmakers want to know if SVB’s leadership broke the law.
Tuesday, Sens. Elizabeth Warren (D-MA) and Richard Blumenthal (D-CT) sent a letter to the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) asking the agencies to investigate whether or not SVB executives broke any laws by handing out annual bonuses as the bank was going under.
Green, who has been vocal about the need for broader criminal accountability of banking executives, wrote in a tweet earlier this week, “What's the point of $250,000 FDIC limit if it is busted through with no consequences for bad actors?? If that limit is breached, should come with: JAIL for bank execs. Clawback of Friday bonuses/looting by those execs. No help for crypto bros. [and] Tighter regulations going forward.”
The FDIC declined to comment when TYT asked if bank executives could face any civil or criminal penalties for issuing bonuses while on the brink of ruin.
Green told TYT that it’s time for Pres, Joe Biden to take a tough stance on banking executives and others as the 2024 election cycle approaches, given Donald Trump’s “strategy of out-flanking fellow Republicans and neutralizing Joe Biden on economic populist issues.”
The Warren/Blumenthal letter to the DOJ and SEC asks for a “comprehensive investigation” of SVB’s collapse and says the incident led to fears about “contagion spreading to other parts of the financial system,” which led the federal government to take action.
Biden announced Monday that a federal investigation would be under way to find out “what happened and why.”
The senators’ letter alleges “a pattern of risky and questionable decision making” by SVB officials that may have led to SVB’s failure and sent “ripple effects being felt throughout the economy.”
Warren and Blumenthal wrote that the actions taken by bank executives and others – including “self-dealing, failure to meet disclosure requirements and fiduciary duties, insider trading, and more” – raised concerns that they may have been acting illegally.
In a statement to TYT, Green said it would be politically advantageous for Biden “to go hard” at big banking, oil, and pharmaceutical executives.
“With so much at stake in 2024, this is a really bad time for Biden to be perceived as soft on oil companies -- or on bankers who looted their own bank as it was in freefall,” said Green.
In an op-ed for the New York Times, Warren said that SVB executives were busy boosting their own accounts while “leaving countless businesses and nonprofits with accounts at the bank alarmed that they wouldn’t be able to pay their bills and employees.”
Progressive lawmakers said a collapse like that of SVB was predictable given Pres. Donald Trump’s 2018 rollback of some Obama-era Dodd-Frank banking laws.
Now, to restore consumer protections and banking regulations, Warren and Rep. Katie Porter (D-CA) have introduced a bill to give the Federal Reserve strict oversight of banks with at least $50 billion in assets and subject those institutions to stress tests to reduce the risk of collapse. The Trump-era rollbacks reportedly shielded SVB from such stress tests.
Shareholders have since reportedly filed a class action suit against SVB Financial Group, SVB CEO Greg Becker, and SVB CFO Daniel Beck for hiding how increased interest rates could leave the bank susceptible to a bank run.
TYT Washington Correspondent Candice Cole was previously a correspondent and senior White House producer for the Black News Channel and has worked at a number of local news outlets. You can find her on Twitter @CandiceColeNews.